The Colombian subsidiary of PharmaCielo Ltd. (TSX-V: PCLO and OTCQX: PCLOF) has been authorized to produce and export 10 tonnes of high-THC cannabis by its federal government, which had previously restricted international sales of the psychoactive compound.
The approval is directed toward the fulfillment of existing sales agreements for THC-rich medical cannabis, the company said in a statement Wednesday. PharmaCielo is permitted to produce and deliver psychoactive compounds as part of the three-year, 30 tonne extracts agreement the firm announced in January, intended for the German market.
Commercial quotas obtained from the ministries of justice and health allow the company to begin cultivation and processing of 10 tonnes of THC-dominant dry flower.
PharmaCielo says the new capability enhances its product development flexibility and will accelerate strategic priorities to expand beyond CBD oils and isolates to better meet market demand.
A spokesperson told Mugglehead the firm isn’t releasing any revenue details yet, but as THC extract has a higher market value, and this quota is in association with an ongoing contract relationship, PharmaCielo expects the deal will strengthen revenues over the long term.
The company says it will be able to maintain its industry-leading $0.04 cost per gram to produce the higher-value product.
CEO David Attard says the approval is a milestone for the company.
“This THC quota, coupled with expanded processing and extraction capacity, enables greater flexibility for us to fulfill current international customer obligations as well as to engage the B2B market with a broader product offering range at scale,” he said in the statement.
The truly successful medical use of cannabis depends — to a great extent — on managing its psychoactive and non-psychoactive properties, president Henning von Koss added.
“A broad portfolio is important, but even more important is the flexibility and capability to quickly turn the components of that portfolio into in-demand formulations,” he said. “As we broaden our portfolio through 2020, we will be working concurrently with our customer base and the medicinal community to identify the appropriate formulations and concentrations of cannabinoids and terpenes to meet a variety of market-specific medicinal regulatory needs, and which are sourced from our proprietary strains that provide unique profiles.”
The quotas received for commercial cultivation, processing and export are in addition to separate quotas previously granted for scientific purposes.
Stock in PharmaCielo hovered around $0.70 on the day.
Top photo via PharmaCielo